Reining in the Administrative State

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Increasingly, Congress writes sweeping, big-picture legislation (think Obamacare) and gives regulatory agencies a free hand to fill in the details. Meanwhile, it’s the agency-written rules and regulations that determine how the law gets implemented and how it will affect the everyday lives of our people.

This is the last thing the Founders wanted. They created three distinct and independent branches of government — legislative, executive and judicial — to safeguard Americans’ personal, political and economic liberty. Yet over the course of the 20th century, Congress habitually delegated its legislative/rule-making authority to executive branch departments and independent agencies.

Why? Typically, lawmakers are eager to “do something” about a problem. But that doesn’t mean they’re capable of grappling with the complex technical issues involved (e.g., determining cost-effective health and safety standards). Nor does it make them eager to leave their “fingerprints” on a rule that may prove quite unpopular. The easy way out is to pass a “big picture” bill that lets the other guy — an unelected bureaucrat — make the hard decisions.

The result is the creation of a “fourth branch of government”: the administrative state. Gary Lawson, professor of law at Boston University, notes:

“Many administrative agencies have authority over matters that are far removed from any of the enumerations of the Constitution. … Many of these agencies — the so-called independent agencies — are statutorily insulated from presidential control. And to cap things off, the agencies perform all of the functions of government at the same time: They promulgate rules, enforce the rules, and adjudicate their own enforcement actions.”

In exercising executive, legislative and judicial powers, these administrative bureaus possess precisely the dreadful combination of powers that Madison called, in Federalist No. 48, “the very definition of tyranny.”

The emergence of the administrative state has led to an explosion of red tape. In 2009 alone, agencies added a record-breaking 163,333 pages of rules to the Code of Federal Regulations. From March to September 2010, federal officials published more than 4,000 pages of rules on Obamacare alone.

The health care rule-making thus far exemplifies the arbitrariness of the administrative state. For example, the law calls for phasing out insurance coverage limits over five years, a provision that could mean that Americans enrolled in low-cost plans will be unable to keep them (notwithstanding the president’s promises to the contrary). But the law also gives the secretary of health and human services authority to waive this provision temporarily on a case-by-case basis. Thus far, the secretary has granted more than 900 such annual waivers, affecting as many as 2.4 million people.

What determines who benefits from a waiver and who doesn’t? Who knows!? But the disproportionately large percentage of union-based plans exempted fuels the suspicion that political connections are a factor.

Indeed, Obamacare and last year’s Dodd-Frank financial reform bill appear poised to open the floodgates to the arbitrary exercise of bureaucratic power. As noted in a Dec. 8 New York Times article:

“[These] laws were so broad and complex that executive-branch regulators have wide leeway in determining what the rules should say and how they should be carried out. In all, the bills call for drafting more than 300 separate rules on a rolling schedule by about 2014, plus dozens of other studies and periodic reports. That may be only the beginning. A recent report from the Congressional Research Service said the publication of rules under the health care law could stretch for decades to come.”

It’s past time for Congress to curtail and reverse the growth of the administrative state. First, it must stop feeding the beast. Rather than delegate broad authority to agencies, lawmakers should do the job they were hired to do: Start writing laws clearly and concisely so that everyone knows precisely how they are to be implemented and what they are expected to do.

Next, they should make formal rule-making the norm. That’s the way it was from 1946 until the 1970s, when more informal rule-making came to the fore.

Formal rule-making, under the 1946 Administrative Procedures Act, requires public evidence-gathering and an oral hearing presided over by an administrative law judge. Contending parties have the right to present evidence and cross-examine witnesses. It prohibits ex parte communications with the judge, making it harder for special interests or politics to influence final rules. It also requires the regulatory decision to be clearly based on the hearing record.

Moreover, Congress should create a Congressional Office of Regulatory Review (CORR). Modeled after the Congressional Budget Office, CORR would report on the estimated costs and impact of regulatory authority proposed in bills under consideration.

The administrative state continues to grow only because the people’s elected representatives condone it. Congressional leadership committed to promoting transparency, curbing bureaucratic power and restoring the Founders’ vision of separated powers of government can roll it back.

Robert E. Moffit is senior fellow in the Heritage Foundation’s Center for Policy Innovation.